The euro area economy expanded more quickly than analysts had expected in the second quarter, according to official figures released Monday. The stronger-than-forecast reading suggests the bloc has held up better than many economists had anticipated, even as higher borrowing costs continue to weigh on parts of the economy.

The data comes as the European Central Bank prepares for additional interest-rate cuts, reflecting a broader shift in policy as inflation eases. With price pressures cooling, policymakers have more room to support growth, though they remain cautious about cutting too aggressively while the recovery remains uneven.

The latest numbers will be closely watched by markets and businesses across the bloc, especially in countries where household spending and industrial demand have been slower to recover. A more resilient economy could give the ECB flexibility, but it also underscores the challenge of balancing growth support with long-term price stability.

While the headline figure was encouraging, the outlook for the eurozone still depends on whether demand can strengthen without reigniting inflation. For now, the data points to an economy that is performing better than expected just as the ECB prepares to ease policy further.